kansas state board of healing arts · kansas state board of healing arts 800 sw jackson, lower...

Kansas State Board of Healing Arts Safeguarding the Public ~ Strengthening the Healing Arts

May 7, 2014

Kelli J. Stevens, JD General Counsel

Kathleen Selzler Lippert, JD Executive Director

The Business of Medicine

…and Your Medical License

IT’S NOT JUST MEDICINE ANYMORE

Medicine – it’s more than:

• Anatomy

• Aliments

• Diagnosis

• Treatment

Medicine means business





Enterprise

Medicine

For Business

WHAT DO YOU KNOW?

• Corporate practice of medicine

• Fee-splitting

• Groupon

• Medical Spa

• Concierge Medicine

• Franchise Medicine



DO YOU AGREE ?

1. A beauty salon can bring a physician in a ½ day

each week to do Botox injections for a

percentage of the revenues from this service.

2. Your non-licensed spouse can own part of your

medical practice.

3. You can co-own a medical practice with a PA or

an APRN?



DO YOU AGREE ?

4. Walgreens can legally own a medical practice

located in their stores.

5. You can contract with a management company

to run the operations and do marketing for your

medical practice for a percentage of the

revenues.



DO YOU WANT TO:

• Open a combined practice

with a chiropractor?

• Be a medical director for a

Med Spa?

• Have a concierge practice?

• Work for a vein clinic

franchise?



CORPORATE PRACTICE OF MEDICINE DOCTRINE

• Lay corporations have no professional rights,

privileges or powers.

• Lay corporations may not engage in the practice

of medicine directly or indirectly by employing

licensed professionals.



CORPORATE PRACTICE OF MEDICINE DOCTRINE

• Why? Potential conflict of interest between

corporate financial goals and needs of patients.

• General corporations aren’t subject to

professional standards or regulatory oversight.

• Exception for hospitals and medical schools.



CORPORATE PRACTICE - WHAT’S LEGAL?

• A physician or group of physicians can form a

“professional” business entity (LLC, PA) to

practice medicine.

• Certain licensed professionals can form a

professional business entity to practice more

than one profession (ex. MD and DC). There

are some limitations.



CORPORATE PRACTICE - WHAT’S LEGAL?

• A physician can contract with a management

company to run their clinic.

• May contract for management company to

do office billing, or marketing.

• Important to have legal counsel experienced

in health care business structures.



CORPORATE PRACTICE - WHAT’S NOT LEGAL?

• Management company cannot control medical

decision-making.

• Medical practice cannot have unlicensed

owners/investors.

• A “general” corporation cannot hire a

physician.

• An out-of-state professional business entity

cannot provide medical services in Kansas.



FEE SPLITTING

Federal anti-kickback law:

It is a felony to solicit, receive, offer or pay

anything of value, directly or indirectly, overtly

or covertly, in cash or in kind, in return for

referring patients or services for which payment

is made by a federal health care program, such

as Medicare or Medicaid.



FEE SPLITTING

Kansas law:

A physician may not directly or indirectly give or

receive any fee, commission, rebate or other

compensation for professional services not

actually and personally rendered, other than

through the legal functioning of lawful

professional partnerships, corporations or

associations.



FEE SPLITTING

Federal Stark law:

A physician may not refer Medicare or Medicaid

patients for designated health services to an

entity in which the referring physician (or his/her

immediate family) has a financial relationship,

with a few exceptions.



FEE SPLITTING

Kansas self-referral law:

A physician may not refer a patient to a health

care entity for services if the physician has a

significant investment interest in the health care

entity, unless the physician informs the patient

in writing of such significant investment interest

and that the patient may obtain such services

elsewhere.



GROUPON

How it works:

A business (or medical practice) agrees to sell

its service at a discount and Groupon offers the

discounted service through online media.

Individuals pay Groupon directly, and Groupon

reimburses the business half of the amount it

collects.



GROUPON

What is wrong:

Groupon requires that you pay them a

percentage of the fees collected for a

professional medical service, and therefore it is

fee splitting.



MEDICAL SPAS

• Med spas offer aesthetic medical procedures such as laser hair removal, vein treatments, Botox injections, laser fat reduction and tattoo removal.

• Med spas may employ allied health professionals or aestheticians to perform treatments delegated and supervised by a physician.



MEDICAL SPAS

Key issues:

• Who owns the medical spa

• How are fees paid

• How are medical services delegated and

supervised

• Standard of care

• Other regulatory requirements



OTHER MED SPA CONCERNS

Practicing at malls, fairs and doing Botox parties:

• Patient confidentiality issues

• Patient record-keeping issues

• Safety and cleanliness issues

• Continuity of care issues



CONCIERGE MEDICINE

• Concierge medicine is a relationship between a

patient and a primary care physician in which

the patient pays an annual fee or retainer. In

exchange, the physician provides enhanced

care and/or access.

• May also be called boutique, retainer or VIP

medicine.

• Typically cash-only, which lowers overhead.



CONCIERGE MEDICINE

Pros:

• May be able to provide personalized patient

care.

• May be able to provide care a lower cost.



CONCIERGE MEDICINE

Cons:

• May be engaged in unauthorized business of

insurance.

• May violate Kansas prohibition on excessive

fees

• May violate Federal laws.



FRANCHISE MEDICINE – “McMEDICINE”

• Typically offers medical services in many

different states through a common model that

is provided by local physicians.

• May be owned by a physician or be a general

corporation.

• Same name, marketing and structure in all

locations.

• Different buy-in models.



FRANCHISE MEDICINE – “MCMEDICINE”

• Medical weight loss clinics

• Med spas

• Vein treatments

• Hormone replacement

• Pain management



FRANCHISE MEDICINE – “MCMEDICINE”

• In general, “McMedicine” is not legal in Kansas.

• Can be the corporate practice of medicine.

• Can involve illegal fee-splitting arrangements.

• May be susceptible to HIPAA or other privacy

violations.




Business of Medicine Take Aways:

• Know corporate practice prohibitions

• Know your business associates

• Know acceptable business practices

• Know an experienced attorney



Scenario #1:

Skin Online is a telemedicine company that

wants to contract with dermatologists across the

country to evaluate photos of skin conditions

which customers upload to its website for a flat

$89 fee. After the evaluation, the physician may

write a prescription for the patient or

recommend further in-person evaluation. The

physician is paid a portion of the fee for each

online evaluation.



Scenario #2:

A prestigious beauty spa would like to expand

into offering aesthetic medical procedures. The

owner asks if you would consider entering a

contract to be the spa’s medical director. Your

responsibilities would be to order Botox, obtain

medical laser equipment, train the spa’s

cosmetologists and come by once a week to

provide some supervision to them. You would

be paid 50% of the fees.



Scenario #3:

A national medical weight loss chain contacts

you with a great opportunity to start your own

bariatric practice. They will set you up with a

clinic and handle all of your operations, billing

and marketing. You must form your own

business entity for the practice itself. The

practice would then pay the chain a hefty flat

monthly fee for your rent and the services you

use.



Scenario #4:

A physician you were friends with in medical

school phones to tell you he is starting a new

primary care practice called All Access

Physicians. It will be a concierge practice

offering unlimited visits, phone calls and

diagnostic testing for the very wealthy patients

who can afford to pay the hefty annual contract

fee up front and with no refunds. He wants you

to join him as a partner.



DO YOU AGREE…THE ANSWER:

1. A beauty salon can bring a physician in a ½ day

each week to do Botox injections for a

percentage of the revenues from this service.

• No, never, don’t do it.




2. Your non-licensed spouse can own part of

your medical practice.

• No, sorry honey.




3. You can co-own a medical practice with a

PA or an APRN?

• Yes, integrated practice is okay if

structured appropriately.




4. Walgreens can legally own a medical practice

located in their stores.

• No, it just looks that way.




5. You can contract with a management company

to run the operations and do marketing for your

medical practice for a percentage of the

revenues.

• No, the compensation can’t be revenue-

based



MAIN AGENCY CONTACTS

Executive Director,

Kathleen Selzler Lippert, JD

[email protected] 785.296.8561

General Counsel,

Kelli J. Stevens, JD


Chief Litigation Counsel,

Reese E. Hays, JD


Chief Disciplinary Counsel,

Dan Riley , JD


Licensing Administrator,

Katy Lenahan


Medical Director,

John F. McMaster, M.D.

[email protected]

Contact information

mailto:[email protected]






QUESTIONS?

Kansas State Board of Healing Arts

800 SW Jackson, Lower Level – Suite A

Topeka, KS 66612

Phone: (785) 296-7413

Toll Free: 1-888-886-7205

Fax: (785) 296-0852 www.ksbha.org

Questions?

What can we do to serve you and

improve health care for Kansans?

http://www.ksbha.org/

kansas state board of healing arts · kansas state board of healing arts 800 sw jackson, lower...

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